How do taxes (VAT) work for sellers?
As a UK registered company, we are obliged to abide by the laws of England, as laid out in point 1.6 of our Seller Terms and Conditions. Part of this is to pay VAT (value-added tax) to the UK tax authorities.
Artfinder's commission and sellers' subscription are being charged for a service provided to our sellers and therefore we are obliged to charge 20% VAT on those services provided to UK residents and non-VAT registered members of the EU.
VAT is currently chargeable by Artfinder in the following circumstances:
- You are UK resident
- You are resident in the EC (not UK) but not VAT registered
VAT is not currently chargeable by Artfinder to you in the following circumstances:
- You are a resident in the EC (not UK) and VAT registered and have provided us with a valid VAT registration number OR with other sufficient evidence that you are trading in the business capacity (company registration certificate etc)
- You are resident outside the UK and the EC
*Please note: The VAT tax is being charged and collected in order to be paid to the tax office i.e. it is not an additional charge to raise Artfinder's profits.
Changes to VAT from 1st January 2021
According to the recent advice, UK tax authority " HMRC has confirmed that many business-to-consumer (B2C) services will follow the same rules for both EU and non-EU customers, and will be VAT-free from 1 January 2021". This means that sellers based in the European Union (and not registered for VAT in their country) will no longer be charged the UK VAT (20%) on Artfinder services, such as the commission fees, subscription charges and promotional package sales ("Service Fees"). VAT will continue to be charged to UK sellers as before. There will be no changes in the VAT treatment to non-EU sellers.
We have now added clarifying wording to this effect in our Commission and Fees Policy.
For more information, please have a look through the Brexit Knowledge Base article.